By Peggy Qualls, Sales and Community Relations Manager —
If you are considering a move to Kendal at Granville or another continuing care retirement community (also known as a CCRC or life plan community), you will want to know about an important tax consideration. Many residents of Life Plan communities, like Kendal at Granville, can qualify for a tax deduction on a portion of their entry fee and monthly fees. Although we can talk about the nuances of the law, three residents’ personal stories may be more insightful for those who are not yet convinced.
According to Dick Johnston, a resident who is also a member of the Board of Trustees here at Kendal at Granville: “To use the deduction, you must have continuing taxable income sufficient to use the benefit. It is a personal decision–one size does not fit all. We selected the Traditional LifeCare program and receive approximately $25,000 per year in a tax deduction, after a first-year deduction of $75,000.”
Some new residents are astonished at the true advantage they realize after moving in. Virgil Hoftiezer states: “Jan and I came to Kendal at Granville because we do not have long-term health care insurance and needed to have, among a short list of ‘must haves,’ financial security in a Life Plan community. Kendal offered that. But because we made the arrangements from long distance, I obviously did not fully comprehend all of the tax advantages offered by KAG until the first tax season after we moved in. Because a good portion of our entrance deposit covered long-term health care it provided a huge tax deduction. Our tax refund that first year was an extremely pleasant surprise — the largest tax fund we have ever received. We continue to receive a welcome and necessary tax refund annually on the monthly fees paid to Kendal since a portion of that is also considered long-term care coverage under the plan we chose. The bottom line is that we have found an additional financial advantage to living here at Kendal at Granville that adds to the wisdom of our decision to move here in the first place. Our only regret is that we did not come to Kendal at Granville sooner.”
Another resident echoes those sentiments. Steve Katz explains: “We joined the Kendal at Granville community on Nov. 3, 2014. We paid the entrance fee and our first monthly fee and thought, ‘It’s all cash outflow from here.’ But we were wrong! When tax time came around in 2015, with a big portion of the entry fee and the monthly fee being prepaid health care, it was tax deductible (on our LifeCare contract). Not only did we not pay any income tax at all, we got back a nice refund! And ever since then, each year we still deduct a large sum because of the health care component of our monthly fees. So please don’t think that payments to Kendal are money all gone. A significant amount comes back to you!”
If you are interested in learning more about how a Life Plan contract might provide financial as well as physical and emotional benefits to you, call Angie Jordan in the Marketing Department today at 888.607.6660 to schedule an appointment!